Managing a trust is not as easy as it sounds. You cannot just set money aside, name a trustee, and let them handle the details. What if the trust includes a family business, multiple investment accounts, or real estate? In such a case, a single trustee is forced to juggle too many responsibilities. This can lead to bad investment decisions, family disputes, or mismanagement.
The solution to this problem is to create a directed trust whereby responsibilities are split among different experts. The financial, legal, and family needs of the trust are thus handled separately.
For instance, in a company, the CEO cannot also be the accountant, HR manager, and sales director. A directed trust works the same way because it assigns roles to the right experts.
When one trustee is in charge of everything, emotions can get in the way, especially when it comes to money matters. If a beneficiary feels shortchanged or disagrees with how assets are handled, it can turn into a legal battle.
In a directed trust, these issues are less likely to occur because decision-making is shared. For example:
Mississippi allows directed trusts under Section 91-8-715 of the state’s Uniform Trust Code. Under this provision, different fiduciaries can be held accountable if they don’t follow their responsibilities. Courts have the power to remove advisors or trustees if they mismanage the trust.
Is a Directed Trust Right for Your Estate?
If your trust includes businesses, investments, or valuable property, a directed trust could be a smarter way to manage assets. To learn more about setting up a directed trust in Mississippi, contact O’Brien Law Firm, LLC, today for guidance.
Caring for a loved one with a disability comes with important financial decisions. While you want to provide for their future, if you give them money directly, you could put their Medicaid or Supplemental Security Income (SSI) at risk. A Special Needs Trust (SNT) helps solve this problem. An SNT allows you to set aside funds for their care without affecting their ability to receive government assistance.
An SNT is a legal arrangement that holds assets for a person with disabilities. Instead of giving money directly to the individual, you place the funds in a trust and let a trustee manage it. With an SNT in place, the money is used for approved expenses and the beneficiary is still eligible for government programs.
Funds in the trust can be used for any of the following:
Choosing the right type of trust depends on where the assets come from.
A well-structured SNT provides long-term financial security. Without one, an inheritance or large gift could make the beneficiary ineligible for Medicaid and SSI. Once that money runs out, they may have trouble requalifying for benefits.
An SNT also protects the beneficiary from mismanaging funds. A trustee oversees spending, ensuring the money is used wisely. This prevents financial abuse or unintentional misuse that could leave the individual without resources.
A Special Needs Trust helps you provide financial support while protecting government benefits. It ensures your loved one has access to medical care, personal services, and quality-of-life improvements. Contact O’Brien Law Firm, LLC, in Southaven, MS, today to learn how an SNT can fit into your estate plan.
Life can be full of unexpected challenges. No one ever thinks they will face a lawsuit or deal with aggressive creditors, but it happens quite often. For families who have worked hard to build their wealth, protecting those assets is incredibly important. Protecting family wealth requires careful and strategic planning. If you are wondering how to keep your family’s financial future safe, here are some advanced strategies that can help.
A Family Limited Partnership, or FLP, is a smart way to protect family assets while keeping them within the family. An FLP involves transferring assets like property or investments into a partnership. Family members become limited partners, but control stays with the general partner, who is often a parent or family leader.
An Asset Protection Trust (APT) is one of the strongest ways to keep wealth safe. An APT takes assets out of your name and puts them into a trust controlled by a trustee. Because the trust cannot be changed once it is set up, creditors cannot access those assets. Offshore APTs offer even more protection since they are beyond the reach of U.S. courts.
Sometimes, how you own property can make all the difference. Married couples, for example, can title property as “Tenants by the Entirety.” This form of ownership protects property from creditors if only one spouse is in debt. Creditors cannot force the sale of the property to collect on a debt owed by just one partner. This simple change can offer a strong layer of protection for your family’s most valuable assets.
For business owners, accounts-receivable financing can be an effective tool for asset protection. This strategy involves borrowing against the money a business is owed and moving that cash into safer investments, like annuities or retirement accounts. By doing this, the business appears less valuable to creditors, and personal or family wealth stays secure.
O’Brien Law Firm, LLC, has the experience to create a personalized plan that keeps your financial future safe. Contact us today to start protecting what you have worked so hard to achieve.
Estate planning becomes more complex when it involves leaving assets directly to grandchildren. The Generation-Skipping Transfer Tax (GSTT) was created to ensure that taxes are paid at each generational level. This tax can significantly impact how grandparents structure their estate plans, especially if they want to preserve wealth for future generations.
The GSTT is a federal tax applied to transfers made to “skip persons.” A skip person is typically a grandchild or any relative who is more than 37½ years younger than the person making the transfer. The tax applies to direct gifts, trust distributions, or transfers that bypass the immediate next generation. At a flat rate of 40%, the GSTT can create a major financial burden if not planned for effectively.
Below are various ways GSTT affects estate planning for grandchildren.
The GSTT reduces the value of assets reaching grandchildren if they exceed the current exemption amount. For 2025, the exemption is $13.99 million per individual. Any transfer beyond this limit is taxed at 40%, significantly lowering the inheritance for future generations.
Trusts are a common way to transfer wealth, but they must be managed properly to avoid unnecessary taxes. For example:
GSTT liability can arise from:
The GSTT adds another layer of complexity to estate planning, especially for those wishing to leave a legacy for their grandchildren. However, with proper planning, such as using trusts and allocating exemptions wisely, families can reduce its impact. If you are considering how the GSTT affects your estate plan, contact O’Brien Law Firm, LLC, today to learn how we can help you protect your family’s future.
When most people think about estate planning, they imagine retirees or wealthy individuals with extensive assets. However, estate planning is not just for older adults or those with significant wealth. For young adults, having basic estate planning documents can provide peace of mind, protect loved ones, and ensure personal wishes are honored in unexpected situations.
Estate planning is not solely about dividing up money or property. It is about making important decisions regarding your health, assets, and loved ones. Even if you are in your twenties or thirties and do not own much, you are likely to still have possessions and responsibilities that need to be addressed.
For example:
For young adults with children, having an estate plan is crucial. If something happens to you, these documents allow you to appoint a trusted guardian to care for your child. This ensures that your child’s future is in the hands you choose, not a court-appointed guardian. Estate plans can also specify how financial resources should be managed for your child’s education, healthcare, or extracurricular activities.
Once you turn 18, privacy laws prevent your parents or loved ones from accessing your medical records or making decisions on your behalf. This can create complications during emergencies. By preparing documents like a healthcare directive or a durable power of attorney, you can:
Estate planning is not just about what happens after you are gone. It is about ensuring your wishes are followed, your loved ones are cared for, and your responsibilities are handled. Young adulthood is the perfect time to take control of your future. Contact O’Brien Law Firm, LLC, today to learn how to get started on this essential process.
